PRESS RELEASE
Published on
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FOR IMMEDIATE RELEASE: MGP INGREDIENTS TO EXPAND
KANSAS CITY FACILITY
ATCHISON, Kan., March 12, 2003--The Board of Directors of MGP Ingredients,
Inc. (MGPI/Nasdaq) has approved plans for a $3.8 million expansion project at
the company's plant in Kansas City, Kan. Expected to be completed by March,
2004, the expansion will involve the installation of additional equipment to
extend the company's line of Wheatex textured wheat proteins and other protein
and starch-based ingredients. Approximately half of the project's cost is
expected to be offset by funds provided under a previously announced U.S.
Department of Agriculture (USDA) program to support the development and
production of value-added wheat proteins and starches.
"This expansion is indicative of the progress we are making in building our
specialty ingredients business," said Ladd Seaberg, president and chief
executive officer. "Because current customer growth and demand should exceed the
plant's capacity for some of our products in the next fiscal year, it is
necessary to take this measure now to be well positioned for growth."
MGPI acquired the Kansas City facility in February, 2001. It was formerly
owned by Thompson's Nutritional Technology, Inc. "This acquisition has become a
wonderful asset for the company," Seaberg said. "In a relatively short period of
time, it has substantially strengthened our capabilities to meet demands in the
marketplace while also giving us greater flexibility in the types of goods and
services we can offer our customers," he added.
The company produces several varieties of its Wheatex product at the plant.
Ranging in size from small flakes to large chunks, Wheatex is used to improve
the textural quality and flavor profile of vegetarian and extended meat
products. A separate portion of the Kansas City facility is dedicated to the
production of MGPI's Polytriticum lines of edible and non-edible wheat-based
polymers that can be used in the manufacture of pet treats and biodegradable
items. Enhancements will also be made to that section of
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ADD 1--MGP INGREDIENTS TO EXPAND KC FACILITY
the plant as part of the expansion project. Additionally, approximately $1
million of the total projected cost of the expansion is earmarked for the
purchase and installation of new equipment to support ongoing research and
development at the plant. With some modifications, this equipment can be used to
supplement Wheatex production, according to Seaberg.
"We're very excited to move forward with this project," said Mike
Trautschold, executive vice president of marketing and sales. "The investment in
research and development will help address opportunities presented by current
and future customers. It enables us to work significantly on broadening our line
of Wheatex products, which can be produced to replicate the appearance and
texture of multiple meat, fish and poultry products. The same holds true for our
Polytriticum resins, which continue to experience growing demand, mainly from
manufacturers of pet treats and natural pet chews."
The USDA program to support the development of value-added proteins and
starches was implemented in June, 2001. Administered by the USDA's Commodity
Credit Corporation, it was granted in lieu of an extended quota on imports of
foreign wheat gluten, the protein portion of wheat flour. Over the life of the
program, which is scheduled to end May 31, 2003, MGP Ingredients is eligible for
approximately $25.6 million of the program total of $40 million. For the first
12 months of the program, approximately $17.3 million was allocated to the
company. The remaining $8.3 million was allocated to the company in July, 2002.
The funds must be used for capital, research, marketing and promotional costs
related to value-added wheat proteins and starch products.
In November, 2002, the company completed an $8.3 million expansion at its
Atchison, Kansas plant. This expansion involved the installation of additional
processing and drying equipment for the production of specialty wheat proteins
for bakery, pasta and noodle and related food markets, both domestic and
foreign. The company also recently completed enhancements to equipment it uses
to produce a number of natural protein and starch-based ingredients for the
personal care market.
This news release contains forward-looking statements as well as historical
information. Forward-looking statements are identified by or are associated with
such words as "intend," "believe," "estimate," "expect," "anticipate,"
"hopeful," "should," "may" and similar expressions. They reflect management's
current beliefs and estimates of future economic circumstances, industry
conditions, company performance and financial results and are not guarantees of
future performance. The forward-looking statements are based on many assumptions
and factors, including those relating to grain prices, gasoline prices, energy
costs, product pricing, competitive environment and related marketing
conditions, operating efficiencies, access to capital, actions of governments or
government officials and actions of insurers. Any changes in the assumptions or
factors could produce materially different results than those predicted and
could impact stock values.
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